The 73 Billion Euro Question: Why Rheinmetall's Record Backlog Can't Lift Its Stock
Published on 07/08/2026 at 17:19 | Redaktion boerse-global.de
The math didn't add up for long. Rheinmetall's order book swelled to a record €73 billion by March 2026, yet the Dax-listed defense giant has seen its market value shrink by more than a third this year. Investors who once climbed aboard the geopolitical tailwind are now demanding proof that the company can convert contracts into cash — and a single cancelled frigate program has crystallized that doubt.
Shares slid 3.99% on Wednesday to €1,071.80, deepening a year-to-date loss of 33.08%. That puts the stock more than 46% below its all-time high of €1,995.00 reached in October 2025. While the broader defense sector has drawn support from fresh US-Iran tensions, Rheinmetall's problems are homemade: the loss of the F126 frigate contract to rival TKMS has blown a hole in the naval division's growth plan.
A 300 Million Euro Hole in the Forecast
The Bundeswehr's decision to award the next-generation frigate deal elsewhere forced Rheinmetall to slam the brakes on its Naval Systems expansion. The unit had aimed to hire 1,000 new employees; nine out of ten of those positions are now frozen. About 100 workers have already been brought on and remain in limbo. Industry estimates peg the potential revenue shortfall for 2026 at up to €300 million — a setback that management is still weighing against the full-year guidance of €14 billion to €14.5 billion in sales, confirmed as recently as May.
Should investors sell immediately? Or is it worth buying Rheinmetall?
That uncertainty hangs over the stock more heavily than any broad sector rotation. The company's first-quarter numbers were solid enough — revenue rose 8% to €1.9 billion and operating profit jumped 17% to €224 million — but the single-program vulnerability has shattered the narrative of effortless growth. The target of €20 billion in new nominations now looks distant.
UnterlĂĽĂź as a Strategic Counterweight
Not everything is going wrong. In Lower Saxony, Rheinmetall is building a joint plant with Lockheed Martin to produce ATACMS rocket motors and key components — the first such facility outside the United States. Production is slated to start in 2027. That move underscores the group's structural diversification: when naval projects stumble, land systems and precision munitions pick up the slack. The recent NATO summit in Ankara reaffirmed Rheinmetall's role as a cornerstone of European defense architecture.
Analysts are largely brushing off the frigate fiasco. Berenberg cut its price target to €1,600 but kept a "Buy" rating, calling the naval disappointment digestible. Bernstein is even more bullish with a €1,900 target. Yet the technical picture tells a different story: the stock trades nearly 30% below its 200-day moving average, and the 50-day average is a further 6% overhead. With a relative strength index of 48.8, the shares are neither oversold nor overbought — they are simply drifting, waiting for a catalyst.
The Credibility Test Ahead
The era of automatic gains for any defense stock is over. Rheinmetall now faces a two-front challenge: it must demonstrate that it can manage the Naval Systems workforce freeze without incurring heavy restructuring costs, and it must show progress on delayed ammunition and truck deliveries when it reports second-quarter results. Investors will be watching less for new contract headlines and more for execution — because a €73 billion backlog buys no patience in a falling market.
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